Taylor et al v. DOES 1-10

Filing 12

ORDER denying 10 Motion for Discovery. The parties are reminded to read the order in its entirety for detailed information. Signed by Senior Judge James C. Fox on 5/8/2014. (Grady, B.)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NORTH CAROLINA
EASTERN DIVISION
No. 4:13-CV-218-F

BENJAMIN TAYLOR, GREENWOOD
MANAGEMENT,
Plaintiffs,
v.
JOHN DOES 1-10,
Defendants.

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ORDER

This matter is before the court on the Plaintiffs’ (collectively “Taylor”) motion for leave
to conduct early discovery [DE-10]. Taylor seeks leave to subpoena a third-party website owner
in an effort to identify the names of the John Doe Defendants, who are anonymous posters
associated with the website. Taylor submitted some earlier similar requests, which the court
denied without prejudice because he failed to “address the issues courts typically consider when
deciding [similar motions].” October 21, 2013 Order [DE-9]. Taylor promptly responded to the
court’s denial with the instant motion [DE-10, -11]. However, Taylor has not made a showing
sufficient to warrant disclosure of the identities of these anonymous online speakers and Taylor’s
motion is therefore DENIED without prejudice (again).
BACKGROUND
Taylor alleges that the Doe Defendants published various “untrue, false, misleading and
deceptive Internet postings about Plaintiffs.” Compl. [DE-1] ¶ 1. Taylor owns Greenwood
Management, an investment firm with its principal place of business in Spain. The Doe
Defendants are anonymous internet posters on the website whocallsme.com. Allegedly, these

Defendants are competitors of Greenwood Management who have embarked on a smear
campaign in an effort to drive business away from Greenwood and to their competing firms. The
postings include statements such as “[y]es, this number is a scam. It’s a company who poses as a
legitimate investment firm, ATM Capital, but they sell you stocks that don’t exist” and “[t]his
number belongs to a company that steals contact data . . . to try getting people’s money for
supposed investment opportunities.” Compl. [DE-1] ¶ 21. Taylor alleges the following claims
against the Doe Defendants: (1) “false designation of origin and false representation” under the
Lanham Act; (2) violation of the North Carolina Unfair and Deceptive Trade Practices Act,
(“NCUDTPA”), N.C. Gen. Stat. § 75-1, et seq.; (3) tortious interference with business
relationships and prospective economic advantage; (4) defamation per se under North Carolina
law, or in the alternative, (5) defamation per quod under North Carolina law.
After several unsupported requests to conduct early discovery/issue subpoenas, which the
court denied, Taylor filed the instant motion requesting early discovery and a memorandum in
support. In his brief, Taylor notes that he has made efforts to ascertain the identities of the Doe
Defendants without using the subpoena power of the court, but such efforts have been
unsuccessful. Brief in Supp. Mot. for Early Discovery [DE-11] at 3. Taylor requests leave to
conduct early discovery for the purpose of obtaining the identities of the anonymous posters.
ANALYSIS
“The designation of a John Doe defendant is generally not favored in the federal courts; it
is appropriate only when the identity of the alleged defendant is not known at the time the
complaint is filed and the plaintiff is likely to be able to identify the defendant after further
discovery.” Chidi Njoku v. Unknown Special Unit Staff, 217 F.3d 840, 840 (4th Cir., July 7,
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2000) (unpublished table decision); Roper v. Grayson, 81 F.3d 124, 126 (10th Cir. 1996);
Gillespie v. Civiletti, 629 F.2d 637, 642 (9th Cir. 1980). Accordingly, where a plaintiff
sufficiently alleges that the defendants’ conduct was unlawful and the plaintiff is likely to be able
to identify the defendants, the courts have allowed requests to compel production of anonymous
individuals’ identities. See Columbia Ins. Co. v. Seescandy.com, 185 F.R.D. 573, 579 (N.D. Cal.
1999); Alvis Coatings, Inc. v. John Does One through Ten, No. 3L94-CV-374-H, 2004 WL
2904405, at *3-4 (W.D.N.C. Dec. 2, 2004).
However, such requests may contravene First Amendment free speech rights. See Doe v.
2TheMart.com Inc., 140 F. Supp. 2d 1088, 1092-95 (W.D. Wash. 2001). The First Amendment
protects anonymous speech, including anonymous speech on the internet. E.g., Buckley v. Am.
Constitutional Law Found., 525 U.S. 182, 199-200 (1999); McIntyre v. Ohio Elections Comm’n,
514 U.S. 334, 341-42 (1995); see also Reno v. ACLU, 521 U.S. 844, 870 (1997) (holding First
Amendment protections extend to speech on the internet). Because anonymous speakers have a
First Amendment right to retain their anonymity, requests to use the subpoena power to reveal
the identity of anonymous online speakers require First Amendment scrutiny. See In re
Anonymous Online Speakers, 661 F.3d 1168, 1174-76 (9th Cir. 2011). When presented with
such a request, the courts must balance the First Amendment rights of anonymous speakers with
the rights of aggrieved individuals to address legitimate claims against anonymous posters in a
judicial forum. See Independent Newspapers, Inc. v. Brodie, 966 A.2d 432, 449-50 (Md. 2009);
Seescandy.com, 185 F.R.D. at 577-78.
In an effort to address this issue, state and federal courts have developed a wide array of
standards that a plaintiff must satisfy before issuing a subpoena ordering production of the
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anonymous individuals’ identities. The standards, which are summarized in In re Anonymous
Online Speakers, 661 F.3d 1168 (9th Cir. 2011) and Independent Newspapers, Inc. v. Brodie,
966 A.2d 432 (Md. 2009), range from a “good faith” assertion of a claim for relief to a showing
commensurate with that needed to withstand a motion for summary judgment. Anonymous
Online Speakers, 661 F.3d at 1174-76; Independent Newspapers, 966 A.2d at 449-57. As
relevant to this case, some courts require that the plaintiff demonstrate his suit could withstand a
hypothetical motion to dismiss. Seescandy.com, 185 F.R.D. at 579. The degree of First
Amendment protection afforded the particular speech at issue “should be a driving force in
choosing a standard by which to balance the rights of anonymous speakers [with the rights of
aggrieved parties].” Anonymous Online Speakers, 661 F.3d at 1177.
Although the Fourth Circuit has not addressed the appropriate legal standard for ordering
identification of anonymous online speakers, in Lefkoe v. Jos. A. Bank Clothiers, Inc., 577 F.3d
240 (4th Cir. 2009), the court affirmed a district court order to produce a nonparty anonymous
witness for deposition over his First Amendment objection. Id. at 248-49. The Fourth Circuit
reasoned that production was warranted “[b]ecause the Doe Client’s letter was commercial
speech [and] any First Amendment right to speak anonymously [in the commercial speech
context] ‘enjoys a limited measure of protection, commensurate with its subordinate position in
the scale of First Amendment values, and is subject to modes of regulation that might be
impermissible in the realm of noncommercial expression.” Id. at 248 (quoting Bd. of Trustees of
SUNY v. Fox, 492 U.S. 469, 477 (1989)). Commercial speech is “expression related solely to the
economic interests of the speaker and its audience.” Central Hudson Gas & Elec. Corp. v.
Public Serv. Comm’n of N.Y., 447 U.S. 557, 561 (1980).
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As in Lefkoe, this case also involves commercial speech.1 The website comments can
fairly be characterized as expression “related solely to the economic interests of the speaker and
its audience[,]” id., because the statements disparage Taylor’s business practices and Taylor has
alleged the speakers are his competitors. Considering the “limited measure of protection”
afforded commercial speech, the court concludes that the relevant standard in this case for
ordering disclosure of the identities of the anonymous speakers should likewise be somewhat
limited. See Anonymous Online Speakers, 661 F.3d at 1177. The court therefore adopts the
“motion to dismiss” standard, which has been characterized as the “lowest bar the courts have
used” in evaluating these requests. Id. at 1175. Thus, before Taylor can use the subpoena power
of the court to identify the speakers, he must demonstrate that at least one of the claims in his
complaint would survive a hypothetical Rule 12(b)(6) motion to dismiss. See Seescandy.com,
185 F.R.D. at 579.
This standard is well established. The purpose of a motion to dismiss under Rule
12(b)(6) is to test the legal sufficiency of the complaint, not to resolve conflicts of fact or to
decide the merits of the action. Edwards v. City of Goldsboro, 178 F.3d 231, 243-44 (4th Cir.
1999). While the court accepts the factual allegations as true, the “‘[f]actual allegations must be
enough to raise a right to relief above the speculative level’ and the plaintiff must allege ‘enough
facts to state a claim to relief that is plausible on its face.’” Wahi v. Charleston Area Med. Ctr.,
Inc., 562 F.3d 599, 615 n.26 (4th Cir. 2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544,

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The court is not making a definitive finding that the speech at issue in this case is categorically
commercial. Given the posture of the case, nobody is contesting Taylor’s characterization of the speech
as commercial and the court’s review of the complaint does not reveal that the position is clearly
erroneous. However, in the event this case proceeds to the point that the Defendants are actually
identified, the Defendants are free to argue that the speech should be characterized differently.

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555 (2007)). “A claim has facial plausibility when the plaintiff pleads factual content that allows
the court to draw the reasonable inference that the defendant is liable for the misconduct
alleged.” Aschcroft v. Iqbal, 556 U.S. 662, 678 (2009). The court may consider “documents
incorporated into the complaint by reference, and matters of which a court may take judicial
notice” when deciding a Rule 12(b)(6) motion. Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551
U.S. 308, 322 (2007).
Taylor’s brief in support of his motion for early discovery does not address this standard.
Instead, it provides a chart containing various quotations from the website and allegations that
the statements are deceptive or misleading. That is not sufficient. Taylor must assume that a
Defendant has appeared and challenged the legal sufficiency of the complaint. To demonstrate
how at least one of his claims would survive a Rule 12(b)(6) motion, Taylor must provide the
court with the legal elements of the particular claim and explain how the factual allegations in the
complaint support each of the required elements of the claim. This requires citation to case law
articulating the elements of the claim as well as application of the principles described above to
the factual allegations in the complaint. Simply listing quotations from the website and
explaining how those quotations are deceptive, with no citation to authority of any kind, is not
sufficient.
In addition to demonstrating that the complaint would survive a hypothetical motion to
dismiss, the court also requires documented attempts to notify the Doe Defendants that they are
subject of a possible subpoena or order for disclosure. See Independent Newspapers, 966 A.2d at
457; Seescandy.com, 185 F.R.D. at 579. Although Taylor notes in his motion that he has “made
every effort to discover the identity of the person or persons who have committed these acts[,]”
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Brief in Supp. Mot. for Early Discovery [DE-11] at 3, Taylor does not describe his efforts to
notify or serve the Defendants in any detail. See Seescandy.com, 185 F.R.D. at 579 (noting that
“the party should identify all previous steps taken to locate the elusive defendant” and describing
relevant actions the court found sufficient to do so). In addition to the steps described in
Seescandy, Taylor must also post notification of his request for identification on the relevant
website discussion boards. Independent Newspapers, 966 A.2d at 457. Once these notification
steps have been taken and Taylor has afforded the Doe Defendants a reasonable opportunity to
respond, Taylor must document these efforts in any renewed motion for early discovery.
Before concluding, the court finds it prudent to explain why it is not simply ordering
disclosure of the identities of the Defendants under the reasoning of the Fourth Circuit’s Lefkoe
opinion. After finding that the speech at issue in Lefkoe was commercial speech, the Fourth
Circuit affirmed the district court’s order to produce the anonymous witness without requiring
the notification or motion to dismiss showings described above. Lefkoe, 577 F.3d at 248-49; see
also Anonymous Online Speakers, 661 F.3d at 1175 (noting that Lefkoe did not articulate a
particular evidentiary standard for ordering disclosure of the identities of anonymous speakers,
“other than the general and long-standing precepts governing commercial speech”). In Lefkoe,
the Fourth Circuit employed the traditional commercial speech test from Central Hudson Gas &
Electric Corporation v. Public Service Commission of New York. 447 U.S. at 566. Doing so, the
court held that the government regulation (ordering production of a material witness over his
First Amendment objection) was “narrowly drawn” to achieve a substantial governmental
interest in providing a Defendant a full opportunity to defend itself against serious allegations.
Lefkoe, 577 F.3d at 248-49.
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This case presents an entirely different set of circumstances than Lefkoe, which in the
court’s view justifies requiring a more significant showing. Unlike Lefkoe, the Plaintiff here is
requesting identification of anonymous online speakers who have not appeared in this case or had
an opportunity to contest production of their identities. In order to protect the First Amendment
rights of speakers whose interests are not currently represented in the case and in an effort to
avoid “fishing expeditions” where a plaintiff may file a lawsuit simply to unearth the identities of
the online speakers, courts have understandably required more than the traditional commercial
speech analysis applied in Lefkoe. See Independent Newspapers, 966 A.2d at 449 (“[Anonymous
internet speakers] have a First Amendment right to retain their anonymity and not to be subject to
frivolous suits for defamation brought solely to unmask their identity.”). None of these concerns
were present in Lefkoe, which involved an anonymous witness whose interests were fully
represented in the litigation and who was critical to the Defendant’s ability to defend against the
claims. Lefkoe, 577 F.3d at 249. In addition, the anonymous speaker in Lefkoe had a full and fair
opportunity to present his First Amendment arguments before the court ordered his production at
the deposition, a circumstance that substantially distinguishes this case from Lefkoe.
CONCLUSION
For the foregoing reasons, the motion to take early discovery [DE-10] is DENIED
without prejudice. Counsel may file a renewed motion within forty-five days of the date of this
order, but the renewed motion must comply with the principles outlined above. The court will
consider extensions of this deadline as needed. Failure to file a renewed motion may result in
dismissal of this case for failure to prosecute.

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SO ORDERED.

Qt\..
This the _Q_ day of May, 2014.

nior United States District Judge

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